Rohit Land Inc v Cambrian Strathcona Properties Corp, 2015 ABQB 375

Court of Queen ’ s Bench of Alberta Citation: Rohit Land Inc v Cambrian Strathcona Properties Corp, 2015 ABQB 375 Date: 2015l0611 Docket: 1403 08276 Registry: Edmonton Between: Rohit Land Inc. and North Sherwood Ltd. Plaintiff/(Applicants, Respondents by Cross-Application - and - Cambrian Strathcona Properties Corp. and Mattamy (Sherwood Park) Limited Defendants/(Respondents, Applicants by Cross Application) _______________________________________________________ Decision on

Summary Judgment Application and Cross-Application for

Summary Dismissal of the Honourable Mr. Justice D.R.G. Thomas _______________________________________________________ Table of Contents A Overview .. 3

B Facts . 3 C Disputed Facts . 6 D Positions of the Parties . 7 E Issues . 8 F Analysis . 8

(1) Summary judgment 8

(2) Is the Option Agreement ambiguous? . 11

(3) Is the Easement a lien, charge, interest or encumbrance? . 15

(4) Did Rohit cause or allow the Easement to be registered? . 15

(5) Alternative analysis . 16

(6) Conclusion on alleged ambiguity of Option Agreement 19

(7) Is the Easement an implied easement, public easement or easement of necessity? . 19

(8) Militating factors . 22

(9) Other evidentiary issues . 24 G Appropriate Remedy . 24

(1) Injunction . 24 (2) Section 190(1) of the Land Titles Act 25 H Conclusion on Rohit’s

Summary Judgment Application . 27 I

Summary Dismissal of Rohit’s Claims against Mattamy . 28 J Costs . 28 Appendix “A” . 30 A Overview [ 1 ] The Plaintiffs, Rohit Land Inc (“Rohit”) and North Sherwood Ltd (“North Sherwood”) seek

summary judgment on part of their claim against Cambrian Strathcona Properties Corp (“Cambrian”) and Mattamy (Sherwood Park) Limited (“Mattamy”). North Sherwood is a wholly owned subsidiary of Rohit. Rohit and North Sherwood are referred to collectively as either the “Plaintiffs” or “Rohit”, unless the context makes it clear that a reference to Rohit is only to Rohit Land Inc. [ 2 ] The only part of the claim for which the Plaintiffs seek

summary judgment is solely in respect to the discharge of an easement registered against certain lands, described in greater detail below. [ 3 ] The Defendant Mattamy cross-applies for

summary dismissal of the Plaintiffs’ claims against it. The Defendant Cambrian had also filed two cross-applications, one for consolidation of this Action with another one, and the other to amend Cambrian’s Statement of Defence and Counterclaim. These applications were not before me at this special hearing and were adjourned sine die . [ 4 ] Cambrian did not file any affidavit evidence on the

summary judgment/summary dismissal applications. Radhe Gupta, President of Rohit and North Sherwood, swore an affidavit and a supplemental affidavit in support of the Plaintiffs’ application. Tim Warner, Senior Vice-President of Land Development for Mattamy also swore an affidavit and a supplemental affidavit. [ 5 ] For the reasons which follow, I find that

summary judgment is available to Rohit and is granted. Mattamy’s

summary dismissal application is refused. B Facts [ 6 ] The parties agree on the core facts, which I summarize below. Other factual issues will be dealt with elsewhere in these

reasons. [ 7 ] Cambrian was the owner of certain parcels of land located in Strathcona County. These lands are subject to the Cambrian Crossing Area Structure Plan, as amended. The original Area Structure Plan was adopted in 2010 (the “ASP”) and subsequently amended effective in 2014 (the “Amended ASP”). The significance of this amendment will be discussed later in these reasons. [ 8 ] On August 29, 2012, Cambrian and Rohit entered into a written purchase and sale agreement (the “Rohit PSA”) whereby Cambrian agreed to sell to Rohit one quarter

section and to grant an option to Rohit on another quarter section. As part of the Rohit PSA, Cambrian and Rohit agreed that Rohit would have a period of time during which it would make an election as to which quarter

section it was going to purchase (the “Rohit Lands”) and on which quarter

section the option would be granted (the “Option Lands”). The election was to be made at least 30 days prior to the closing date for the purchase of the Rohit Lands. [ 9 ] Various terms of the Rohit PSA governed each of the purchase and the option. The Rohit PSA contemplates an option agreement relating to the Option Lands (the “Option Agreement”). The Rohit PSA included various conditions precedent and other provisions typical of these land transactions. [ 10 ] Pertinent to this application, Cambrian represented and warranted to Rohit at

Article 4.1 that, among other things: (

i) the titles to the Rohit Lands and the Option Lands were free and clear of all liens, mortgages, charges and encumbrances save only for certain encumbrances identified as “Permitted Encumbrances” (see

Article 4.1(b)); and (ii) there were no other agreements affecting the Rohit Lands or the Option Lands (see

Article 4.1(l)). [ 11 ] The term “Permitted Encumbrances” is defined in the Rohit PSA as certain encumbrances set out in

Schedule “A” (for the Rohit Lands) and

Schedule “B” (for the Option Lands) and “all other liens, charges, interests or encumbrances which the Purchaser has caused to be registered against the Lands”. [ 12 ] In April 2013, Rohit notified Cambrian of its election and gave notice of the satisfaction/waiver of the conditions precedent as contemplated in the Rohit PSA. The Rohit Lands are legally described as: Firstly: THE NORTHWEST QUARTER OF

SECTION THIRTEEN

(13) TOWNSHIP FIFTY THREE

(53) RANGE TWENTY THREE

(23) WEST OF THE FOURTH MERIDIAN CONTAINING ONE HUNDRED AND SIXTY

(160) ACRES, MORE OR LESS, EXCEPTING THEREOUT: B) 1.36 HECTARES (3.36 ACRES) MORE OR LESS AS SHOWN ON SUBDIVISION PLAN 8920377 EXCEPTING THEREOUT ALL MINES AND MINERALS Secondly: PLAN 8920377 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS AREA: 1.36 HECTARES (3.36 ACRES) MORE OR LESS [ 13 ] The Option Lands are legally described as: MERIDIAN 4 RANGE 23 TOWNSHIP 53

SECTION 24 QUARTER SOUTH WEST

CONTAINING 64.7 HECATRES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS

A) PLAN 0521833 SUBDIVISION 4.25 10.50 EXCEPTING THEREOUT ALL MINES AND MINERALS [ 14 ] The Option Lands lie immediately to the north of the Rohit Lands. [ 15 ] Pursuant to the provisions of the Rohit PSA, subsequent to the election being made, Cambrian and Rohit entered into the Option Agreement. By operation of the Option Agreement, Cambrian granted to Rohit the exclusive option to purchase the Option Lands until a defined termination date (May 14, 2016). [ 16 ] Representations and warranties similar to those found in the Rohit PSA are found at

Article 4.1 of the Option Agreement, including that: ... (

h) there is no contract or agreement entered into by the Optionor [Cambrian] relating to the Lands which has not been disclosed to the Optionee [Rohit], and the Optionor agrees that unless the Optionee consents in writing, no contract or agreement will be entered into prior to the Option Termination Date [May 15, 2016] provided however, that the Optionor will be permitted to enter into a farm lease for the Land from time to time for a period no longer than of a one (1) year term, with such lease to contain an early termination clause that will include compensation to the tenant payable by the Optionee. [ 17 ] The Option Agreement also contained a representation and warranty related to encumbrances on the title to the Option Lands (at

Article 4.1(b)), which reads: (

b) the Optionor, upon completion of the transactions contemplated in the Purchase and Sale Agreement [i.e. the Rohit PSA], has the right and power to obtain and transfer good and marketable title to the Lands to the Optionee free and clear of all liens, mortgages, charges, encumbrances and interests whatsoever save only for the Permitted Encumbrances. [ 18 ] “Permitted Encumbrances” are defined in the Option Agreement as “those encumbrances listed in

Schedule ‘A’ hereof or such other liens, charges, interests or encumbrances which the Optionee has caused or allowed to be registered against the Lands”. A completed

Schedule “A” was not attached to the Option Agreement. [ 19 ] Subsequent to each of the Rohit PSA and the Option Agreement, Rohit registered two caveats against the Option Lands, one bearing Instrument No. 122 298 143 (dated September 11, 2012) and the other bearing Instrument No. 132 128 984 (dated May 7, 2013). [ 20 ] Separate from the dealings between Cambrian and Rohit, Cambrian entered into an agreement for purchase and sale with Mattamy (the “Mattamy PSA”) whereby Mattamy agreed to purchase two quarter sections from Cambrian (the “Mattamy Lands”).

The Mattamy Lands are immediately to the east of the Rohit Lands and the Option Lands. Copies of the Certificates of Title for the Mattamy Lands are attached as Appendix “A”. [ 21 ] The terms of the Mattamy PSA required Cambrian to grant an easement on the Option Lands for the benefit of the Mattamy Lands. Pursuant to such terms, Cambrian granted the easement (the “Easement”) prior to the transfer of the Mattamy Lands to Mattamy.

The Easement, which was registered as Instrument No. 132 341 854 on October 23, 2013, grants certain rights, privileges and easements on, over, and under the Option Lands for (among other things) the construction, installation, operation, and repair of various utilities, and for the construction of roadways. [ 22 ] Rohit was unaware of the Easement at the time that it was registered against title to the Option Lands. [ 23 ] Cambrian conveyed the Mattamy Lands to Mattamy on October 30, 2013 pursuant to the terms of the Mattamy PSA. [ 24 ] On November 4, 2013, Cambrian provided Rohit with a copy of the registered Easement.

Through correspondence from its solicitors, Rohit demanded immediately that Cambrian remove the Easement from the Option Lands. Cambrian refused. [ 25 ] One year later, on or about November 4, 2014, Rohit attempted to exercise its option on the Option Lands pursuant to the provisions of the Option Agreement by providing Cambrian with an Option Notice and tendering the Option Deposit, both as contemplated in the Option Agreement.

On November 12, 2014, Cambrian’s solicitors (not the same solicitors appearing for Cambrian on this application) returned the Option Notice and the Option Deposit to Rohit’s solicitors, unused. Rohit attempted to exercise its option anew on November 14, 2014 and once again, Cambrian’s solicitors returned the documents and funds to Rohit’s solicitors.

On December 16, 2014, Rohit’s solicitors delivered to Cambrian’s solicitors the Option Notice, a cheque representing the Option Deposit and the balance of the Purchase Price, and other documents contemplated by the Option Agreement in order to complete the transfer of the Option Lands in accordance with the provisions of the Option Agreement. Cambrian’s solicitors returned the documents and cheque to Rohit’s solicitors. C Disputed Facts

[26] The parties disagree on whether Rohit consented to the granting and registration of the Easement. [27] It is clear from the affidavit evidence and the evidence from questioning on affidavits that Rohit has never signed an explicitconsent to the Easement and I so find. Cambrian and Mattamy rely on Rohit’s involvement in the process to amend the ASP as itsimplied consent to the Easement. They say that the Amended ASP is written and this satisfies the contractual requirement that Rohit’sconsent to the Easement be in writing.

Rohit acknowledges its involvement in seeking amendments to the ASP and acknowledges thatthe Amended ASP is a written document, but denies that it consented to the granting or registration of the Easement. [28] In addition, the parties disagree on the consequences of the absence of

Schedule “A” to the Option Agreement. [29] Some dispute exists as to whether North Sherwood is Rohit’s assignee of the Rohit PSA. The significance of this relates towhether Rohit is a proper party. Part of the confusion arises from the use by Rohit’s counsel of terminology relating to “assignments” invarious documents in this Action, including in the pleadings.

Notwithstanding this characterization, because North Sherwood is a whollyowned subsidiary of Rohit, I infer and find as a fact that North Sherwood is Rohit’s nominee under the Rohit PSA. [30] A chambers judge can make inferences of fact based on the undisputed facts before the court, provided that the inferences arestrongly supported by the facts: Wenzel v Desanti, 2011 ABCA 226 at para 20, 510 AR 327 [Wenzel], citing Hughes Estate v Hughes,2009 ABCA 187, 454 AR 190 at para 12; and William A. Stevenson & Jean E. Côté, Alberta Civil Procedure Handbook (Edmonton:Juriliber, 2012) at p 7-13.

There is no evidence before the Court that North Sherwood is anything other than Rohit’s nominee,notwithstanding submissions and the previously mentioned characterization by counsel. Submissions by counsel are not evidence: Listerv Calgary (City) (1997), (AB CA), 193 AR 218 (Alta CA) at para 15, 47 Alta LR (3d) 14 (CA) [Lister]; Poff vGreat Northern Data Supplies, 2015 ABQB 173 at para 90, [2015] AJ No. 291 [Poff]. [31] A review of the above “disputed facts” makes it clear that the basic facts are not actually in dispute. Rather, the disagreementsarise out of the inferences to be drawn from the facts.

D Positions of the Parties [32] I address the specifics of the parties’ respective positions in greater detail in the “Analysis”

section below. A brief

summary oftheir positions follows. [33] The position of Rohit is very straightforward: Rohit and Cambrian agreed, through written agreements, that Rohit holds anoption to purchase the Option Lands.

It says that the terms of the Option Agreement and the Rohit PSA are clear and unambiguous.Since the Easement is not a “Permitted Encumbrance”, Cambrian has breached the Rohit PSA and the Option Agreement by firstregistering and then refusing to discharge the Easement from the title to the Option Lands. [34] Rohit asks that the Easement be discharged, either through the granting of an injunction or through exercise of the Court’sdiscretionary power under s 190(1) of the Land Titles Act, RSA 2000 c L-04 (“LTA”). [35] Both Cambrian and Mattamy oppose the application and take the position that the Easement should not be discharged forvarious reasons.

They further submit that the claim which is the subject of this application should proceed to trial along with theremainder of the claims in the Action. [36] Cambrian asserts it did not breach the Option Agreement or the Rohit PSA. Cambrian says that because

Schedule “A” wasnot attached to the Option Agreement the Court should look to surrounding circumstances and extrinsic evidence to determine whetherthe Easement is a “Permitted Encumbrance”. [37] In Cambrian’s view, the ASP is of particular importance because Rohit was involved in amending the ASP. Cambriansubmits that Rohit was aware of, and agreed to, the eventual plans of Strathcona County to have utilities and roads cross the OptionLands and connect with the Mattamy Lands.

Cambrian submits further that the Easement is proper as it formalizes an implied easement,or a public easement, or an easement of necessity. [38] Alternatively, Cambrian submits that the Easement is not an “encumbrance” at all. Cambrian further submits that the OptionAgreement is not a valid contract due to a failure of consideration and it questions whether the option contemplated in the OptionAgreement was, in fact, exercised.

Lastly, Cambrian submits that Rohit is not entitled to an injunction. [39] The thrust of Mattamy’s submissions is that the Easement is valid and properly registered, and accordingly, the only way thatit can be removed from the title to the Option Lands is with Mattamy’s consent or by Rohit establishing fraud in its registration (which,Mattamy says, has been neither alleged nor proven). Mattamy repeats Cambrian’s submissions that Rohit consented to the Easementthrough its involvement in the ASP amendment process.

Lastly, Mattamy argues that neither specific performance of the OptionAgreement nor an injunction are available to Rohit as Cambrian cannot unilaterally discharge the Easement without Mattamy’s consent. [40] I reiterate that the only issue for which Rohit seeks

summary judgment is in respect to the discharge of the Easement. Allother aspects of Rohit’s claim will be dealt with at some future time. E Issues [41] The overarching issues in this application are: (

a) Should

summary judgment be granted in favour of Rohit?

(

b) If

summary judgment is granted to Rohit, what is the appropriate remedy? and (

c) Should

summary dismissal be granted against Rohit in favour of Mattamy? F Analysis [ 42 ] I turn now to a review of the law dealing with

summary judgment applications.

(1) Summary judgment [ 43 ] Rule 7.3 of the Alberta Rules of Court governs the

summary judgment process: 7.3

(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single and undivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by a referee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as the circumstances require. [ 44 ] The modern procedure for

summary judgment applications in Alberta is based on the Supreme Court of Canada decision in Hryniak v Mauldin , 2014 SCC 8 , [2014] 1 SCR 87 (SCC) [ Hryniak ]. While Hryniak dealt with Ontario civil procedure rules, the Alberta Court of Appeal has affirmed that the principles elucidated by the Supreme Court of Canada case are applicable to civil procedure in Alberta: Windsor v Canadian Pacific Railway , 2014 ABCA 108 , 572 AR 317 (Alta CA) [ Windsor ]. [ 45 ] In determining whether to grant an application for

summary judgment, courts must consider whether a claim (or defense) has merit: Windsor at para 14 ; Stout v Track , 2015 ABCA 10 at para 45 , 9 Alta LR (6th) 341(Alta CA), per Wakeling JA; Access Mortgage Corporation

(2014) Limited v Arres Capital Inc , 2014 ABCA 280 at para 45 , 584 AR 68 (Alta CA), citing Beier v Proper Cat Construction Ltd , 2013 ABQB 351 at para 61 , 564 AR 357 [ Beier ]. [ 46 ] The concept of merit is linked to the concept of “genuine issue for trial”: Amack v Wishewan , 2015 ABCA 147 at para 26 , [2015] AJ No 462 (QL) (Alta CA), citing Hryniak at para 49 , which states: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [ 47 ] The court is not obligated to hear oral evidence when a chambers judge can make a fair and just determination on the merits of an application: Sandhu v Siri Guru Nanak Sikh Gurdwara of Alberta , 2015 ABCA 101 at paras 79-81 , 382 DLR (4th) 150 (Alta CA).

In Can v Calgary Police Service , 2014 ABCA 322 , 584 AR 147 (Alta CA), Wakeling JA indicated at para 104 that “summary judgment is appropriate if the moving party’s position is so compelling that the likelihood of success is very high”. [ 48 ] Beier provides a thorough review of salient principles at paras 66-70 (citations omitted): 66 First, the legal or persuasive burden rests on the moving party...

The moving party must present the facts which, in combination with the applicable law, make its position unassailable if the nonmoving party does not contest the facts and the law… 67 Second, the nonmoving party has no legal or persuasive burden to discharge… In some circumstances the nonmoving party may be at risk of losing the

summary judgment application if it fails to present a version of the facts which is inconsistent with that relied on by the moving party... 68 Third, the motions court may not make findings of credibility and resolve contested fact issues… If a fact on which the moving party relies to support

summary judgment is the subject of a credibility contest, the motion court must dismiss the

summary judgment application…That a controversy over nonmaterial facts exists is irrelevant. 69 Fourth, if the law is unclear, either because the moving party is seeking to extend the scope of a well established proposition or to

make new law, a chambers judge may decline to resolve the dispute. This is so even though the trial judge is, arguably, in no betterposition to decide this challenging legal issue than the chambers judge. The chambers judge may legitimately conclude that her properrole is to identify unassailable positions, which assumes the law on the issue is settled, not develop the law in the course of a

summaryjudgment chambers application… But the chambers judge is entitled to decide the novel legal issue if she wishes to do so. A willingnessto decide such a legal issue would be consistent with the goal of expedited justice… 70 Fifth, a nonmoving party's argument that questioning or trial may produce evidence which assists the nonmoving party is withoutmerit… [49] Relevant to the case at bar are the recent comments of Wittmann CJ that, “disputes over the

interpretation of an instrument,such as a contract, may lend themselves particularly well to

summary judgment”: Attila Dogan Construction and Installation Co vAMEC Americas Ltd, 2015 ABQB 120 at para 52, [2015] AJ No 200 (Alta QB), citing Tottrup v Clearwater (Municipal District 99),2006 ABCA 380, 401 AR 88 (Alta CA). [50] While a chambers judge cannot weigh conflicting evidence,

summary judgment nonetheless remains available in the face ofevidence that clashes if judgment can be granted on the facts propounded by the non-moving party: Sherwood Steel Ltd v OdysseyConstruction Inc, 2014 ABCA 320, [2015] 3 WWR 582 (Alta CA). However, if conflicting affidavits and documents support eitherparty’s position, then

summary judgment should not be granted: Charles v Young, 2014 ABCA 200 at para 4, 577 AR 54 (Alta CA). [51] I recognize that I should not weigh conflicting evidence, but for the purposes of this application, I can assume that theDefendants’ version of any disputed facts is correct. This being stated, however, I am not required to accept their

interpretation of thefacts or the inferences to be drawn from them. [52] With these statements of the law in mind, I turn now to whether

summary judgment with respect to the Easement should begranted in favour of Rohit.

(2) Is the Option Agreement ambiguous? [53] As is evident from the positions taken, the parties dispute the

interpretation of the Rohit PSA and the Option Agreement.Specifically, the parties disagree as to whether the Easement is a “Permitted Encumbrance” under the Option Agreement. [54] For different reasons, the Plaintiffs and the Defendants both suggest that, because

Schedule “A” is missing from the OptionAgreement, this Court should consider extrinsic evidence and surrounding circumstances in order to understand the definition of“Permitted Encumbrances”. The parties all suggest that to interpret the Option Agreement properly, the Court should not restrict itself tofour corners of the contract. [55] Rohit suggests that it is appropriate to use the Rohit PSA in interpreting the Option Agreement.

In making these submissions,it relies on Humphries v Lufkin Industries Canada Ltd, 2011 ABCA 366 at paras 13, 15 and 19, 68 Alta LR (5th) 175 (Alta CA), andSamson Cree Nation v O’Reilly & Associates, 2014 ABCA 268 at para 82, 580 AR 181 (Alta CA) [Samson Cree Nation]. The lattercase is particularly compelling and the paragraph highlighted by the Plaintiffs is worth repeating: 82 There is an even more fundamental rule of contractual

interpretation. Where a contract has several clauses or parts or terms, or thesame parties make two or more contracts at the same time on the same or related topics, the court interprets them together, notin isolation. They are to be interpreted, if possible, to make the parts work harmoniously to achieve the overall goal, not to makethe parts clash... (Emphasis added; citations removed.) [56] Cambrian would have this Court distinguish Samson Cree Nation on the basis that the Rohit PSA and the Option Agreementwere not signed at the same time – they were signed approximately 8 months apart.

However, notwithstanding the passage of timebetween the signing of the Rohit PSA and the Option Agreement, the two agreements were very much contemplated as part of one largertransaction. Indeed, the Rohit PSA contemplates the Option Agreement being executed at some future point, stipulating that the electionas to which quarter

section would be the subject of the option occur at least 30 days prior to the closing on the conveyance of the quartersection to be purchased. The execution of the Option Agreement, logically, was to follow the election. It is particularly noteworthy that adraft version of the Option Agreement was attached as a

Schedule to the Rohit PSA – albeit slightly different in some respects to the onethat the parties actually executed. [57] It is unfortunate that the drafting of the Rohit PSA and the Option Agreement was not undertaken with greater care, such thatthe Rohit PSA was incorporated by reference into the Option Agreement. However, in my view, this oversight in drafting is not fatal toRohit’s argument that this Court should examine the Rohit PSA and the Option Agreement together as part of one global transaction. [58] Rohit submits that any ambiguity caused by the missing

Schedule “A” can be resolved by examining the Rohit PSA togetherwith the Option Agreement. [59] For this Court to consider extrinsic evidence and surrounding circumstances, Cambrian argues that the Court must apply theparol evidence rule, as set out in Guaranty Properties Ltd v Edmonton (City), 2000 ABCA 215, 261 AR 376 (Alta CA) [Guaranty],citing Eli Lilly & Co v Novopharm Ltd, (SCC), [1998] 2 SCR 129, 161 DLR (4th) 1 SCC.

The three main features ofthe rule are described at para 24 of Guaranty: … First, where the written language of an instrument is clear and unambiguous on its face, it is unnecessary to consider extrinsicevidence. Second, where the words are ambiguous, evidence of surrounding circumstances may be admitted to enable the court toproperly construe the language. Third, such evidence must shed light on the surrounding circumstances, not merely on the subjectiveintention of the parties.

[60] In addition, Cambrian relies on the Ontario Court of Appeal case of HE Johnson & Son v Crocker, (ONCA), [1954] 2 DLR 70, [1954] OJ No 55 (Ont CA) for the proposition that the parol evidence rule may be used when a documentplainly omits one or more provisions. [61] Cambrian and Mattamy both urge this Court to consider the implications of Rohit’s involvement in the process of amendingthe ASP. This, they say, points to the indisputable conclusion that Rohit was aware of – and consented to – the roadway and utility accessfrom the Option Lands to the Mattamy Lands.

Therefore, they suggest, Rohit must have agreed to the notion of the Easement, even if itdid not do so expressly. According to Cambrian and Mattamy, this results in their position that the Easement must be a “PermittedEncumbrance”. [62] The Supreme Court of Canada examined the

interpretation of contracts in Creston Moly Corp v Sattva Capital Corp, 2014SCC 53, [2014] 2 SCR 633 [Sattva] at paras 4-48 and 57-60 (emphasis added): 47 …[T]he

interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules ofconstruction. The overriding concern is to determine "the intent of the parties and the scope of their understanding" (Jesuit Fathers ofUpper Canada v Guardian Insurance Co of Canada, 2006 SCC 21, [2006] 1 SCR 744 (SCC), at para 27 per LeBel J; see also TerconContractors Ltd v British Columbia (Minister of Transportation & Highways), 2010 SCC 4, [2010] 1 SCR 69 (SCC), at paras 64-65per Cromwell J).

To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammaticalmeaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration ofthe surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own,because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed....

In a commercial contract it is certainlyright that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of thetransaction, the background, the context, the market in which the parties are operating. (Reardon Smith Line, at p 574, per Lord Wilberforce) 48 The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the natureof the relationship created by the agreement (see Geoffrey L Moore Realty Inc v Manitoba Motor League, 2003 MBCA 71, 173 Man R(2d) 300 (Man CA), at para 15, per Hamilton JA; see also Hall, at p 22; and McCamus, at pp 749-50).

As stated by Lord Hoffmann inInvestors Compensation Scheme Ltd v West Bromwich Building Society (1997), [1998] 1 All ER 98 (UK HL): The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of itswords.

The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using thosewords against the relevant background would reasonably have been understood to mean. [p 115] ... 57 While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed tooverwhelm the words of that agreement (Hayes Forest Services, at para 14; and Hall, at p 30).

The goal of examining such evidence isto deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract.The

interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, atpp 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviatefrom the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc v BC Tel Mobility Cellular Inc(1997), (BC CA), 101 BCAC 62 (BC CA)). 58 The nature of the evidence that can be relied upon under the rubric of "surrounding circumstances" will necessarily vary from case tocase. It does, however, have its limits.

It should consist only of objective evidence of the background facts at the time of the execution ofthe contract (King, at paras 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledge of bothparties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, inthe words of Lord Hoffmann, "absolutely anything which would have affected the way in which the language of the document wouldhave been understood by a reasonable man" (Investors Compensation Scheme, at p 114).

Whether something was or reasonably ought tohave been within the common knowledge of the parties at the time of execution of the contract is a question of fact. 59 It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule. The parol evidencerule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict acontract that has been wholly reduced to writing (King, at para 35; and Hall, at p 53).

To this end, the rule precludes, among other things,evidence of the subjective intentions of the parties (Hall, at pp 64-65; and Eli Lilly & Co v Novopharm Ltd, (SCC),[1998] 2 SCR 129 (SCC), at paras 54-59, per Iacobucci J).

The purpose of the parol evidence rule is primarily to achieve finality andcertainty in contractual obligations, and secondarily to hamper a party's ability to use fabricated or unreliable evidence to attack a writtencontract (CJA, Local 579 v Bradco Construction Ltd, (SCC), [1993] 2 SCR 316 (SCC), at pp 341-42, per Sopinka J). 60 The parol evidence rule does not apply to preclude evidence of the surrounding circumstances.

Such evidence is consistent with theobjectives of finality and certainty because it is used as an interpretive aid for determining the meaning of the written words chosen bythe parties, not to change or overrule the meaning of those words.

The surrounding circumstances are facts known or facts thatreasonably ought to have been known to both parties at or before the date of contracting; therefore, the concern of unreliability does notarise. [Emphasis added.] [63] When considering the surrounding circumstances, courts must exercise caution that they focus solely on the objective contextand not the subjective understanding of one or more of the contracting parties. Recently our Court of Appeal commented on this inLedcor Construction Ltd v Northbridge Indemnity Insurance Co, 2015 ABCA 121 at para 13, [Ledcor]:

13 Clearly all contracts have "surrounding circumstances" and are made within a certain "context". They are described in Sattva at para60 as "facts known or facts that reasonably ought to have been known to both parties at or before the date of contracting". Sattva does notalter the core parole evidence rule: the test for "context" is objective, and the parties are still not allowed to testify as to their subjectiveunderstanding of "what the contract really means or was intended to mean". Sattva recognizes the traditional legal techniques ofinterpreting contracts, and provides at para 50 that "the principles of contractual

interpretation" (the legal component) are applied to thewords of the written contract, "considered in light of the factual matrix" (the factual component)… [64] Thus, while courts may look to surrounding circumstances to ascertain the factual matrix, the starting point is always with thetext of the contract itself. [65] All of the parties, including Rohit, have jumped to an examination of surrounding circumstances and extrinsic evidencewithout fully looking at the text of the definition of “Permitted Encumbrance” in the Option Agreement.

They have bypassed the criticalfirst stage of the parol evidence rule. [66] The term “Permitted Encumbrances” is defined in the Option Agreement as “those encumbrances listed in

Schedule ‘A’hereof or such other liens, charges, interests or encumbrances which the Optionee has caused or allowed to be registered againstthe Lands” (emphasis added). [67] In my view, it is not necessary to turn to surrounding circumstances or extrinsic evidence to understand the meaning of“Permitted Encumbrances”. Since

Schedule “A” does not exist, I must turn to the second part of the definition to determine whether theEasement is a “Permitted Encumbrance”. The two questions that arise under this second part are firstly whether the Easement is a lien,charge, interest or encumbrance; and secondly whether Rohit (i.e. as the Optionee) has caused or allowed the Easement to be registeredagainst the Option Lands.

(3) Is the Easement a lien, charge, interest or encumbrance? [68] The definition of “easement” used by Jeffrey W. Lem and Rosemary Bocska in Halsbury’s Laws of Canada — Real Property,(Markham, Ont: LexisNexis, 2014) (QL) at § HRP-291 is “a type of incorporeal hereditament or servitude, providing a non-possessoryownership interest in land”. [69] Having reviewed the Easement, I am satisfied that it is not a lien or a charge.

The determination to be made is whether it is aninterest or an encumbrance. [70] Cambrian suggests that “the Easement is not an encumbrance at all” because it “gives no rights in and of itself and is fullysubject to future approvals by the County at later stages of development” (Cambrian’s Brief at para 85). [71] The term “encumbrance” is not defined in the Option Agreement.

In the LTA, the word “encumbrance” is defined as “anycharge on land created or effected for any purpose whatever, inclusive of mortgage, mechanics’ or builders’ liens, when authorized bystatute, and executions against land, unless expressly distinguished” (at s 1(e)).

The definition in Black’s Law Dictionary, 8th ed, subverbo “encumbrance” is “a claim or liability that is attached to property or some other right and that may lessen its value, such as a lienor mortgage; any property right that is not an ownership interest”. [72] Hunt J (as she then was) looked at the meaning of the term “interest” in Scurry-Rainbow Oil Ltd v Galloway Estate (1993), (AB KB), 138 AR 321 at para 103, 8 Alta LR (3d) 225 (Alta QB) and adopted the definition found in Black’s LawDictionary, 6th ed, sub verbo “interest”: The most general term that can be employed to denote a right, claim, title, or legal share in something.

In its application to real estate orthings real, it is frequently used in connection with the terms "estate," "right," and "title." More particularly it means a right to have theadvantage accruing from anything; any right in the nature of property, but less than title. [73] It seems illogical that the Easement is neither an ‘interest’ nor an ‘encumbrance’, especially when one considers the context inwhich the term “Permitted Encumbrances” is used in the agreement – such as at

Article 5.5(a). That provision deals with clear title to beconveyed on closing. Moreover, if the Easement is neither an ‘interest’ nor an ‘encumbrance’, there would have been no need to haveregistered the Easement on the certificate of title in the first place. [74] I am satisfied that, at the very least, the Easement is an ‘interest’. It may also be an ‘encumbrance’. For the purposes ofresolving the first question, this is sufficient.

(4) Did Rohit cause or allow the Easement to be registered? [75] Turning now to the second question, I must determine whether Rohit “caused or allowed” the Easement to be registeredagainst the title to the Option Lands. [76] The evidence is clear that Rohit was not involved in the registration of the Easement. That registration took place inconjunction with the transactions resulting in the Mattamy PSA. I find that Rohit did not cause the Easement to be registered. [77] Determining whether Rohit allowed the registration of the Easement requires a deeper examination of the evidence on therecord.

In Radhe Gupta’s affidavit sworn November 10, 2014, he deposes that, upon being made aware of the registration of theEasement, Rohit demanded that Cambrian remove the Easement. This demand was made through correspondence from Rohit’s solicitorsto Cambrian’s solicitors. When Cambrian refused to remove the Easement, Rohit’s solicitors again communicated in writing aboutRohit’s objection to the Easement on December 18, 2013. In questioning on his affidavit, Mr.

Gupta did not resile from his assertionsthat Rohit was not aware of the Easement until after it was registered (see Transcript of Questioning on Affidavit of Radhe Gupta on 3

February, 2015 at p 32 line 20; p 107 line 9 – p 109 line 8). [ 78 ] In the questioning on the affidavit of Mr. Warner (Mattamy’s representative), he was asked whether Mattamy asked Rohit if it was agreeable to an easement being granted over the Option Lands (see Transcript from Questioning on Affidavit of Tim Warner, 18 February 2015, p 27 lines 7-10; p 28 lines 6-9). My

summary of Mr. Warner’s responses is that he was not sure, that he did not remember, and that he could not say with certainty whether Rohit was agreeable or not. Mr. Warner was also not certain whether Cambrian notified Rohit of the Easement (see Transcript from Questioning on Affidavit of Tim Warner, 18 February 2015, p 28 line 23 – p 30 line 2). [ 79 ] Mattamy has not adduced any evidence that Rohit knew about the Easement prior to its registration. Cambrian did not file any evidence opposing this application.

Therefore, I accept Rohit’s evidence that it was not aware of the Easement until Cambrian’s solicitors notified its solicitors. [ 80 ] Based on the evidence before me, I find that the Easement is an interest and that Rohit did not cause or allow it to be registered. Therefore, the Easement is not a “Permitted Encumbrance” as defined in the Option Agreement. (5 ) Alternative analysis [ 81 ] If I am wrong that the Option Agreement is not ambiguous because of the non-inclusion of

Schedule “A”, I will, as the parties urge, examine surrounding circumstances and extrinsic evidence to aid in the

interpretation of the Option Agreement. I do so in keeping with the direction of the Supreme Court of Canada in Sattva and the Alberta Court of Appeal in Ledcor . [ 82 ] I will not repeat the statements of law dealing with surrounding circumstances and the parol evidence rule. [ 83 ] Rohit suggests that the way to resolve any ambiguity in the Option Agreement is by looking at the Rohit PSA. That agreement includes a

Schedule “B” which sets out the “Permitted Encumbrances” for the Option Lands. Rohit also points to various other provisions in the Rohit PSA and the Option Agreement that it says supports its position that the Easement is not a “Permitted Encumbrance” and that Rohit did not impliedly consent to its registration. [ 84 ] Both Cambrian and Mattamy suggest that the non-existent

Schedule “A” renders the Option Agreement ambiguous and, therefore, consideration of the surrounding circumstances and application of the parol evidence rule is appropriate. They argued at length about the significance of Rohit’s involvement in the amendment of the ASP. According to them, the Amended ASP is an integral part of the surrounding circumstances, and, they submit, this Court ought to consider it. [ 85 ] Cambrian points out that this Court must take caution in “reading the [Rohit PSA and the Option Agreement] too closely together” (Cambrian’s Brief at para 67). The reasons for doing so include that (

i) each agreement contains an entire agreement clause, (ii) the two agreements were signed approximately eight months apart, and (iii) the draft Option Agreement appended to the Rohit PSA was simply a “form” of that agreement and subject to change. [ 86 ] Cambrian submits that these concerns establish the need to look to other

interpretation tools. In my view, these concerns demonstrate the importance of first looking to the text of an agreement before resorting to

interpretation tools. This only serves to strengthen my decision above that the absence of

Schedule “A” to the Option Agreement does not create an ambiguity. [ 87 ] However, for the purpose of this alternate analysis, I continue with Cambrian’s arguments. Because the ASP is specifically contemplated in the Rohit PSA and all of the lands in Cambrian Crossing are to be developed in accordance with the ASP, Cambrian argues, the Option Agreement “cannot be properly construed without an understanding of the content of the [ASP]” (Cambrian’s Brief at para 72). [ 88 ] Strathcona County enacted the original ASP by way of Bylaw 37-2010.

The County later amended it with Bylaw 47-2013, which was adopted on April 2, 2014. The evidence on the record is clear that Rohit was involved in advocating and obtaining the amendments. [ 89 ] Both the original ASP and the Amended ASP are attached as Exhibits to the affidavit of Tim Warner sworn on January 30, 2015. Mr. Warner is not the author of either bylaw or the two iterations of the ASP.

None of the parties raised any issue with the admissibility of this evidence. [ 90 ] I note that s 32 of the Alberta Evidence Act , RSA 2000 c A-18, contemplates taking judicial notice of acts, regulations, proclamations and orders made by the Governor General, the Governor General in Council, the Lieutenant Governor and the Lieutenant Governor in Council. This judicial notice does not seem to apply to bylaws created by a county or municipality.

I am aware of some limited case authority that suggests that municipal bylaws must be proved: Lai v Chlumecky , [1991] AJ No 1173 (Alta Prov Ct) ; Essential Foods Ltd v Metrus Properties , [2005] OJ No 6029 at para 30 (Ont. Sup Ct J) . [ 91 ] According to s 4 of the Municipal Government Act , RSA 2000 c M-26 (“ MGA ”), a municipality is a corporation.

Section 33 of the Alberta Evidence Act allows the receipt into evidence of a bylaw of a corporation. If the bylaw is under corporate seal, there is no requirement to prove the seal. [ 92 ] The two bylaws attached to Mr. Warner’s affidavit are not under the seal of Strathcona County. [ 93 ] Common law evidence rules suggest that courts may take judicial notice of legislative facts: R v Malmo-Levine , 2003 SCC 74 , [2003] 3 SCR 571, per Gonthier J (Binnie J concurring) at para 28; see also Sahaluk v Alberta Transportation Safety Board , 2015 ABQB 142 at para 88 . [ 94 ] For the purposes of this application and because none of the parties dispute the inclusion of the original ASP and the

Amended ASP in Mr. Warner’s affidavit, I take judicial notice of both bylaws, together with the original and amended versions of the ASP. [ 95 ] The ultimate question that I must determine at this stage is whether Rohit’s involvement in the promulgation of the Amended ASP demonstrates its consent to the registration of the Easement. By implication, this would mean that the Easement is a “Permitted Encumbrance”. [ 96 ] In its written submissions, Mattamy points to references to the ASP in the Rohit PSA, including at

Article 1.1(

b) and

Article 3.3(a). Mattamy submits that because Rohit and Cambrian jointly retained Stantec Consulting Ltd to prepare the Amended ASP, Rohit reviewed and approved its contents. [ 97 ] According to Mattamy, the words used in the Amended ASP itself are important and relevant. In particular, Mattamy highlights this portion of the plan: “Once adopted, policies contained with the Plan will be binding and will direct the manner in which development occurs within the plan area” (see Exhibit J, p 240, Affidavit of Tim Warner, sworn January 30, 2015).

A reading of the Amended ASP as a whole, suggests Mattamy, points to the conclusion that Rohit was aware of, and consented to, the integration of roadway and utility systems across the parcels of land comprising Cambrian Crossing – including from the Option Lands to the Mattamy Lands. It is argued that this reflects Rohit’s consent to the Easement. [ 98 ] On questioning on his affidavit, Mr. Gupta confirmed Rohit’s involvement with the amendments to the ASP.

When questioned about the placement of roads and services such as utilities, he responded, “They are all defined by the ASP which were [sic] approved by the County and we will comply with the approved ASP unless it is amended otherwise” (see Transcript of Questioning on Affidavit of Radhe Gupta on 3 February 2015 at p 115 lines 13-15). [ 99 ] The MGA contemplates area structure plans at s 633, which states: 633

(1) For the purpose of providing a framework for subsequent subdivision and development of an area of land, a council may by bylaw adopt an area structure plan.

(2) An area structure plan (

a) must describe (

i) the sequence of development proposed for the area, (ii) the land uses proposed for the area, either generally or with respect to specific parts of the area, (iii) the density of population proposed for the area either generally or with respect to specific parts of the area, and (iv) the general location of major transportation routes and public utilities, and (

b) may contain any other matters the council considers necessary. (Emphasis added.) [ 100 ] Additionally, both Cambrian and Mattamy pointed the Court to other sections of the MGA . [ 101 ] In my view, the ASP and the Amended ASP are “big picture” documents. Using the terminology of the MGA , they are a “framework” for future development and do not get into the kinds of detail contemplated in the Easement. This is clear in both the original ASP and the Amended ASP.

In each version, there is a “Mobility Plan” (see Affidavit of Tim Warner, Exhibit G, p 97 – Figure 8 and Exhibit J, p 233 – Figure 7.0), on which a notation states: NOTE: Access points shown depict possible vehicular access to neighborhood precincts. The locations are conceptual only and the actual locations will be determined as development occurs. [ 102 ] Mattamy’s submissions included several references to the Amended ASP as being the “law of the land” in Cambrian Crossing and that “[a]t least by July 25, 2013, all of the figures to the Amended [ASP] had been finalized” (Mattamy Brief at para 43).

However, this argument does not take into consideration the fact that Bylaw 47-2013, which implements the Amended ASP, was not in effect until it passed third reading and was proclaimed by Strathcona County. This occurred on April 2, 2014. While Rohit may have been aware of the contents of the Amended ASP in 2013, it was open to the County to further change the Plan until the time that the Bylaw passed third reading.

This occurred nearly a year after the Option Agreement was executed. [ 103 ] Furthermore, it should not be forgotten that the original ASP was in effect at the time of creation and execution of the Option Agreement.

Even if one accepts, as Mattamy urges, that Rohit was aware of all finalized figures set out in the amendment by July 25, 2013, such date is still more than three months after the signing of the Option Agreement. [ 104 ] In the result, I cannot accept that Rohit’s involvement in the amendments to the ASP necessarily leads to the conclusion that it expressly or impliedly agreed to the granting and registration of the Easement, or that the Easement was impliedly included in the definition of “Permitted Encumbrances” in the Option Agreement. I see no merit in this aspect of the Defendants’ response.

(6) Conclusion on alleged ambiguity of Option Agreement [ 105 ] The evidence with respect to the alleged ambiguity caused by the non-existent

Schedule “A” does not clash. Where the parties

differ is with respect to the

interpretation of the Rohit PSA and the Option Agreement. The parties also disagree on how the Court shoulduse extrinsic evidence in interpreting the agreements. In my view, these are questions of law, which can be properly decided in asummary judgment application: Tottrup v Clearwater (Municipal District) No 99, 2006 ABCA 380 at para 12; 68 Alta LR (4th) 237;Condominium Plan 0125764 v Amber Equities Inc, 2015 ABQB 235 at para 31. [106] I am satisfied that a trial is not needed to reach the conclusions which I have reached.

Whether I look at the plain and ordinarymeaning of the words in the definition of “Permitted Encumbrance” in the Option Agreement, or I look to surrounding circumstances andextrinsic evidence, I come to the same conclusion. The Easement is not a “Permitted Encumbrance” in the Option Agreement.

(7) Is the Easement an implied easement, public easement or easement of necessity? [107] Separate and apart from the issues raised with respect to the alleged ambiguity of the Option Agreement, Cambrian arguesfurther that the Easement is proper as it is formalizes a pre-existing implied easement.

Alternatively, Cambrian suggests also that it mightbe either a public easement or an easement of necessity. [108] Cambrian argues that the ASP “supports the notion of an implied charge or encumbrance over that land, particularly when thatland is owned by developers who have purchased the land specifically to develop it according to the ASP” (Cambrian’s Brief at para72).

It is odd that Cambrian argues that the ASP ought to be viewed as an encumbrance, yet asserts that the Easement itself cannot be anencumbrance. [109] Mattamy and Cambrian both submit that the Easement contemplates a redefinition of the area encompassed to align with theroadways and utility services corridors identified in the Amended ASP (referred to in the Easement Agreement as the “UltimateEasement Area”).

This, they argue, further confirms the notion that the Easement represents a formalization of an implied easement. [110] However, it is of concern that the ‘Ultimate Easement Area’ contemplated in the Easement does not follow the road and utilityright of way alignments set out in the original ASP or in the Amended ASP.

In questioning on affidavit, Mattamy’s representativeacknowledged that at the time the Easement was prepared, the Ultimate Easement Area was not known and that the Easement was basedon a draft plan that was not approved at the time (see Transcript from Questioning on Affidavit of Tim Warner, 18 February 2015, atp 50 line 16 – p 52 line 26). [111] In support of the assertions relating to implied easements, Cambrian points to s 61 of the LTA, which reads in part: 61(1) The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in thecertificate of title, subject to ... (

c) any public highway or right of way or other public easement, howsoever created, on, over or in respect of the land, ... (

f) any right of way or other easement granted or acquired under any Act or law in force in Alberta. [112] Cambrian and Mattamy also rely on the common law requirements of an easement, which are: (

a) there must be a dominant andservient tenement; (

b) the easement must accommodate the dominant tenement; (

c) the dominant and servient tenement owners must bedifferent persons (this requirement has been eliminated in Alberta by s 68 of the LTA); (

d) the right granted must be capable of formingthe subject-matter of the grant (see Sturgeon Hotel Ltd v St Albert (City), 2010 ABQB 725 at para 17, 504 AR 202 (Alta QB); Paul vCanadian Pacific Ltd, (SCC), [1988] 2 SCR 654 at 671, 53 DLR (4th) 487 (SCC)). [113] I am not satisfied that an area structure plan creates an implied easement. If Cambrian’s argument were to prevail, it wouldmean that any time a municipality enacted a bylaw adopting an area structure plan, implied easements for roadways and utilities wouldautomatically be created each and every time.

The problem with this line of reasoning is that, pursuant to the express language of theMGA, an area structure plan provides only a “framework” for subsequent (i.e. future) subdivision and development of lands. If the landsare subdivided and developed then the area structure plan governs. However, if the lands are never subdivided and developed, no personcould ever compel the landowner to adhere to the plan. [114] Cambrian further argues that a public easement (as contemplated in s 61(1)(

c) of the LTA) “has been implied” over the OptionLands since the time the original ASP came into force (Cambrian’s Brief at para 75). Again, this argument is problematic. No publichighway or right of way or other public easement currently exists on the Option Lands. Moreover, neither Cambrian nor Mattamy canpoint to any statute or law that grants a right of way or easement over the Option Lands.

It is true that the Amended ASP will at somepoint lead to rights of way for roadways and utility services over the Option Lands; however, that will not occur until those lands aresubdivided and developed. [115] To round out its submissions on easements, Cambrian suggests that, if nothing else, the Easement is an easement of necessity. Itargues that this Court ought to distinguish the cases provided by Rohit, as those cases refer to “stand-alone” lands. Due to thecircumstances of this case, Cambrian urges the Court to keep in mind the entirety of Cambrian Crossing and its overall development.

Inparticular, Cambrian suggests that “[t]here should be reasonable access to roads and services from the [Mattamy Lands] through the[Option Lands] to the Clover Bar [Road], as contemplated in the [ASP]… Mattamy… is completely reliant on services being broughtthrough the [Option Lands] in order to develop” (Cambrian’s Brief at paras 77-78). [116] While there may be some attractiveness to this argument, in my view, it fails to properly frame the requirements for an easementof necessity.

[117] In Nelson v Stelter, 2011 ABCA 203, 2011 510 AR 153 (Alta CA), Paperny JA (concurring in part with the majority) discussedeasements generally and, more specifically, easements of necessity at paras 36-38 and 40: 36 We are taught in first year property law that the Torrens system of land registration has as its core the principle of indefeasibility oftitle. The theory is that all interests affecting a piece of land are reflected in the registry. However, the system is not absolute, andexceptions, often imported from other land registration regimes, have developed and been legislated.

Known as overriding interests,these exceptions bind subsequent purchasers absent registration. A commonly legislated exception is the public easement. Under theAlberta statute, another exception makes "the land mentioned in any certificate of title ... subject to ... any right of way or other easementgranted or acquired under any Act or law in force in Alberta… 37 Not surprisingly, and in keeping with the primary aim of the Torrens system, Alberta courts have been reluctant to afford broadprotection to unregistered easements. Thus, this Court in construing the specific language of the exception in section 61(1)(

f) chose toexclude private easements granted by express contract, as not having been acquired by statute or under law... The Court concluded,however, that the language of the statute requires that some easements be protected as overriding interests, including, as an example,easements of necessity. 38 In other words, this Court has interpreted the Land Titles Act exceptions to indefeasible title to include implied easements ofnecessity. But that they are excepted and accordingly binding on a subsequent purchaser despite the absence of registration does not endthe inquiry.

In addition to reading the legislation narrowly, most courts, including those in this province, have been reluctant toimply easements and will only imply an easement of necessity if in fact certain prerequisites are met. Not the least of these is therequirement that the implied right of way must be absolutely necessary for the use of the property.

Mere convenience of access isnot sufficient. … 40 A way of necessity can be implied where both dominant and servient tenements have been in a common ownership and one or otherof the tenements is disposed of by the owner, rendering it "impossible to make any use of the dominant tenement" without theimplication of an easement… [Emphasis added; citations omitted] [118] While Paperny JA’s discussion was obiter and was not followed by the majority, I agree with her statements of the law and withher reasoning.

Courts should be loath to imply easements: Germain v Brar, 2010 ABQB 530 at para 32; 503 AR 110; Hough v Alberta,2000 ABQB 1004 at para 4, 284 AR 382 (Alta QB); Barton v Raine, (1980), (ON CA), 29 OR (2d) 685, 114 DLR(3d) 702 (Ont CA). [119] No evidence has been led that the Easement is “absolutely necessary” for the use of the Mattamy Lands, or conversely, for theOption Lands. It appears to me from a review of the maps included in the original ASP and the amended version that the Mattamy Landsare bounded to the east by Highway 21. Therefore, there may be some access from the east or from other directions.

Notwithstandingthis observation, suffice it to say that, quite simply, no evidence was led to support the argument that the Easement fits within therequirements for an easement of necessity. [120] I find it interesting that, while Mattamy broached the issue of easements of necessity in its Amended Statement of Defence,Mattamy did not make submissions about easements of necessity.

Rather, it was Cambrian that raised these concerns. [121] If this was a situation requiring a judicial finding of an implied easement of necessity – or for this to be determined at trial – Iwould have expected Mattamy to have led some evidence in that regard, but it did not. In the face of a

summary judgment application,allegations in pleadings do not suffice. Parties are expected to put their “best foot forward”: Wenzel at para 20. [122] Rohit submits that the inclusion of an “entire agreement clause” in the Option Agreement precludes the creation of an impliedeasement. No authority was cited for this proposition.

However, it certainly makes sense that any purchaser of land would want to knowwhat it was buying, and would not want to find out subsequent to signing an agreement that some other instrument affects the land. [123] On the basis of the foregoing, I see no merit to the Defendants’ allegations and submissions that the Easement merelyformalizes or reduces to writing some pre-existing implied easement, be it a public easement, easement of necessity, or otherwise.

(8) Militating factors [124] Cambrian suggests that there are two factors which militate against granting the Plaintiffs’ application. Firstly, Cambriansubmits that the Option Agreement is not a valid contract because there is a failure of consideration. Secondly, Cambrian disputeswhether the Option was exercised. I do not find either argument persuasive.

However, I will examine each in greater detail. [125] A reference to the word “consideration” is found in the following statement at the beginning of the Option Agreement: NOW THEREFORE this Agreement witnesseth that in consideration of the mutual covenants and agreements herein contained, and forother good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree asfollows… [126] Cambrian submits that these words , taken together with the entire agreement clause in each of the Rohit PSA and the OptionAgreement, mean that the “pre-existing obligation of Cambrian” to enter the Option Agreement “is not sufficient consideration forentering into that agreement” (Cambrian’s Brief at para 92).

It further submits that the “mutual covenants… do not appear to provide anyconsideration, so it [sic] what is left is the phrase ‘for other good and valuable consideration… [which] does not constitute realconsideration in the eyes of the law” (Cambrian’s Brief at para 92, emphasis in original). No authority was cited for this proposition.

[127] Consideration can be determined without the need to look to the Rohit PSA. A reading of the Option Agreement identifiesseveral mutual covenants and promises between Rohit and Cambrian within the constructs of the Option Agreement itself. Mutualpromises serve as consideration: Spruce Grove (Town) v Yellowhead Regional Library (1982),1982 ABCA 369 , 44 AR 48 atpara 7, 24 Alta LR (2d) 163 (Alta CA); Johnson v Breitkreuz, 2005 BCSC 536, 29 RPR (4th) 282 (BC SC), aff’d by 2006 BCCA 30, 51BCLR (4th) 305 (BC CA). In addition, monetary consideration is provided for upon Rohit’s exercise of the contemplated option. [128] The evidence here is sufficient to find, in the context of this

summary judgment application, that the Option Agreement is notinvalid due to a failure of consideration. The mutual promises in the Option Agreement between Rohit and Cambrian representconsideration. Moreover, the mutual promises in the Rohit PSA serve to bolster the position that there is sufficient consideration. [129] Cambrian further asserts that Rohit did not properly exercise the option contemplated in the Option Agreement.

There is noevidence, other than that proffered by Rohit, with respect to Rohit’s efforts and attempts to exercise the option. [130] Relying on Carling Development Inc v Aurora River Tower Inc, 2005 ABCA 267, 371 AR 152 (ABCA), Cambrian suggeststhat Cambrian’s then-solicitor returned Rohit’s documents and funds because the solicitor could not comply with the trust conditions.However, this assertion is not supported by the evidence. Cambrian could have led evidence to this effect but did not do so.

Again, Ipoint out that submissions by counsel are not evidence: see again Lister and Poff. [131] Correspondence from Rohit’s solicitors to Cambrian’s solicitors enclosing an executed Option Notice and payment of theOption Deposit made by way of a certified trust cheque is found at Exhibit “L” attached to Mr. Gupta’s Affidavit sworn November 10,2014. A reference to this is found at paragraph 16 of Mr. Gupta’s affidavit. The Supplemental Affidavit of Mr.

Gupta sworn January 27,2015 also details Rohit’s extensive efforts to exercise the option, including payment of the entire purchase price for the Option Lands. [132] Mr. Gupta’s evidence is uncontroverted that Rohit stands “ready, willing and able to complete the purchase of the Option Landsin accordance with the Option Agreement” (Supplementary Affidavit of Radhe Gupta sworn January 27, 2015 at para 8). [133] The evidence of Mr. Gupta is the only evidence before me on this point and I am satisfied that Rohit has done all it could withinits power to exercise the option in accordance with the Option Agreement.

It is Cambrian’s unilateral refusal to honour the terms of theOption Agreement which is causing the impasse here.

(9) Other evidentiary issues [134] In the Supplemental Affidavit of Tim Warner sworn February 18, 2015, two additional bylaws – Bylaw 36-2010 (North ofYellowhead Area Concept Plan) and Bylaw 46-2013 (Amended North of Yellowhead Area Concept Plan) – are referred to and attachedas exhibits. The inclusion of these Bylaws raises the same evidentiary issues identified above. None of the parties made reference tothese Bylaws in oral or written submissions. Accordingly, I place no weight on them in reaching my conclusions. G Appropriate Remedy [135] I turn now to the appropriate remedy for Cambrian’s breach of the Option Agreement by first registering and then refusing todischarge the Easement.

(1) Injunction [136] Rohit seeks either an injunction requiring Cambrian to discharge the Easement from the Option Lands or an order under s190(1) of the LTA directing that the Easement be removed from the certificate of title. Rohit argues that damages are insufficientbecause the provisions of the Option Agreement dealing with agreements and interests affecting the Option Lands could be characterizedas a negative covenant (i.e. a commitment not to do something).

In written submissions, Rohit suggested that damages “are not usually anappropriate remedy for breach of negative covenants because the purpose of the negative covenant is to prevent parties from committingbreaches, not to force them to pay for committing breaches” (Rohit’s Brief at para 72).

Specifically in support of this argument, Rohitpoints to McDonald’s Restaurant v West Edmonton Mall (1994), (AB KB), 159 AR 120, 22 Alta LR (3d) 402 (AltaQB) [McDonald’s] and Debra’s Hotels Inc v Lee (1994), (AB KB), 159 AR 268, 24 Alta LR (3d) 199 (Alta QB). [137] Rohit further suggests that where there is a breach of a so-called negative covenant, there is a relaxed threshold with respect tothe test for injunctions, relying on McDonald’s at paras 86-89 and Zellers Inc v First Capital Holdings (ALB) Corp, 2009 ABQB 712 atparas 21-25..

In the latter case, McMahon J stated: 21 Zellers cites authorities for the proposition that a clear breach of a clear covenant obviates the need to show irreparable harm: Debra's Hotels Inc v Lee (1994), (AB KB), 24 Alta LR (3d) 199 (Alta QB) Hampstead & Suburban Properties Ltd v Diomedous, [1968] 3 WLR 990 (Eng Ch Div) West Edmonton Mall Ltd. v.

McDonald's Restaurants of Canada Ltd (1993), 1993 ABCA 218 , 141 AR 266 (Alta CA), at267. 22 To quote Debra's Hotels at para 20: From this review of the authorities I am satisfied that in this jurisdiction, at the least, irreparable harm need not be shown if there is aclear breach of a clear covenant. I am not satisfied, however, that in such a case the Court of Appeal has gone so far as to dispensealtogether with an examination of damages or balance of convenience.

I note, however, its observations in Ominayak v Norcen (supra) atp 202 that a consideration of balance of convenience necessarily engages the matter of harm. This suggest to me that, from a practical

point of view, the balance of convenience test would indeed be softened were a restrictive covenant breach at issue. 23 Nevertheless, I am satisfied that Zellers has met the irreparable harm test. This redevelopment will see two new buildings totalling inexcess of 20,000 square feet constructed on either side of the main entrance into the mall parking area.

In addition to the loss of presentparking spaces, the new buildings will house new retail tenants which will in themselves attract more traffic for fewer spots. 24 First Capital argues that if Zellers can show a decline in revenue, then monetary damages will suffice. However, the prospect ofbeing able to link a specific revenue decline to loss of parking as opposed to the economy, the weather, new competition, or a host ofother influences is slim. 25 Clear proof of irreparable harm is not required. Doubt as to the adequacy of damages may be enough.

British Columbia (AttorneyGeneral) v Wale (1986), (BC CA), 9 BCLR (2d) 333 (BC CA) and Amoco Canada Petroleum Co v Alberta &Southern Gas Co (1992), (AB KB), 3 Alta LR (3d) 247 (Alta QB). [138] Mattamy and Cambrian both argue that an injunction is not appropriate in the case at bar. They submit that even if Cambriandid breach the Option Agreement, the appropriate remedy would be damages. [139] The tripartite test for injunctive relief was summarized by the Supreme Court of Canada in RJR-MacDonald Inc v Canada(Attorney General), (SCC), [1994] 1 SCR 311, 111 DLR (4th) 385: (

a) Is there a serious issue to be tried? (

b) Will the applicant suffer irreparable harm not compensable by damages if no injunction is granted? (

c) Does the balance of convenience favour granting the injunction? [140] In oral argument, Rohit’s counsel acknowledged that Rohit was not concerned with whether the Court grants an injunction oruses the power conferred by s 190(1) of the LTA. Ultimately, what it seeks is that the Easement be discharged. [141] Whether an injunction is an appropriate remedy in cases similar to the one at bar I do not say.

In this case, I am not inclined togrant an extra-ordinary remedy such as an injunction where a statutory remedy is available. (2) Section 190(1) of the Land Titles Act [142] Section 190(1) of the LTA states: 190(1) In any proceeding respecting land or in respect of any transaction or contract relating to it, or in respect of any instrument,caveat, memorandum or entry affecting land, the judge by decree or order may direct the Registrar to cancel, correct, substitute or issueany certificate of title or make any memorandum or entry on it and otherwise to do every act necessary to give effect to the decree ororder. [143] Rohit relies on Nature Conservancy of Canada v Waterton Land Trust Ltd, 2014 ABQB 303 at para 417, 97Alta LR (5th) 1(Alta QB) [Nature Conservancy] in support of its submissions that s 190(1) of the LTA “provides the Court with discretion to rectify titleto land even where third party rights are affected” (Rohit’s Brief at para 85). [144] The power contemplated in s 190(1) of the LTA is discretionary: Nature Conservancy at para 415; Clarkson Co v WiebeHoldings Ltd (1983), (AB KB), 26 Alta LR (2d) 390 at para 35, 28 RPR 279 (Alta QB).

As noted in NatureConservancy at para 416 (citing Hart v Boutilier (1916), (SCC), 56 DLR 620, [1916] SCJ No 84 (SCC) per Duff J),that discretionary power must be used with great caution. [145] Mattamy did not address LTA s 190(1) in its written submissions in any substantive manner, but did make some oralsubmissions in that respect. Notably, Mattamy suggests that Nature Conservancy is distinguishable as it dealt with a mutual mistakerequiring rectification. Mattamy also points to the fact that the Easement was properly registered in accordance with the usual LandTitles Office procedure; and is therefore valid.

Since Rohit did not allege fraud in its Amended Statement of Claim, argues Mattamy, thisCourt should not upset the valid registration of the Easement. Cambrian’s submissions do not get into the availability of the statutoryremedy. [146] There are very few reported decisions dealing with s 190(1) of the LTA and its application.

Rohit’s counsel indicated that shecould not find any that establish a test to be followed in situations such as the present; neither could I. [147] However, as I consider the evidentiary record, there is something striking about the potential impact to Mattamy’s rights underthe Easement if I decide to exercise the power granted in s 190(1). Evidence exists that Mattamy was aware of certain risks that mightdevelop as a result of the registration of the Easement.

Article 11.13 of the Mattamy PSA (at Exhibit “H” to the Affidavit of Tim Warnersworn January 30, 2015) provides for reimbursement and indemnity by Mattamy to Cambrian for all costs, charges, expenses anddamages incurred by Cambrian in relation to matters arising from the Easement vis-à-vis the Option Agreement. In questioning on hisaffidavit, Mattamy’s representative confirmed this (see Transcript from Questioning on Affidavit of Tim Warner, 18 February 2015 at p38 line 4 – p 41 line 19). I repeat just one part of the Transcript: Q MS.

AGRIOS: So if I could just, again I’m looking at page 14 of the Purchase and Sale Agreement, and just withrespect to the indemnity under 11.13, to this point has Cambrian called on that indemnity at all? A When you say they have not specifically called on it, but were [sic] aware of its existence.

Q So has Cambrian asked you to pay any of its legal costs yet? A We have not paid any legal costs but we’re aware of the provision. [ 148 ] Other portions of the Transcript, together with the Mattamy PSA itself, demonstrate an awareness on Mattamy’s part that there was a recognized uncertainty as to whether the Easement could properly be considered a “Permitted Encumbrance” under the Option Agreement. In particular I consider

Article 11.12 of the Mattamy PSA, and the Transcript from Questioning on Affidavit of Tim Warner, 18 February 2015 at p 36 line 3 – p 38 line 3, which reads in part (at p 37 line 9 – p 38 line 3): Q MS. AGRIOS: … I take it from that that Mattamy was aware that the easement was not a permitted encumbrance under the Option Agreement? A I think we were aware that there was a possible dispute about whether it was a permitted encumbrance. Q Did you become aware of that just simply based on -- did Mattamy become aware of that simply based on its reading of the Option Agreement?

A It was based on the meeting that we had, the joint meeting in July that I referred to. Q And what was it from the joint meeting in July that led Mattamy to believe that there was a dispute regarding the existence of an easement as a permitted encumbrance under the Option Agreement? A To be clear, the only thing we definitely knew is that

Schedule A was not attached and we knew that Cambrian’s intention was always that all of the lands would be, as I said many times before, the lands would be jointly serviced and there would be cooperation between the landowners. Based on the meeting in July we understood Rohit was not necessarily going to be cooperative, and that’s what I was referring to. [ 149 ] To me, the referenced Articles in the Mattamy PSA and the pages identified in the Transcript (including those portions reproduced above) show that Mattamy and Cambrian were aware of certain risks associated with registering the Easement.

Such risks have materialized. I see no reason why Mattamy should be able to hide behind the registration of the Easement at the Land Titles Office. While the registration of the Easement may have been properly done from a procedural perspective, it was not permitted under the terms of the Option Agreement. [ 150 ] If Mattamy truly were an innocent third party and was unaware of the Option Agreement and Rohit’s position as to the validity of the Easement or some other implied easement, my decision here might by different.

However, in the circumstances, I see no reason why s 190(1) is not an appropriate remedy. [ 151 ] In making this determination, I do not say whether a more appropriate remedy is damages. Unlike equitable remedies, there is no need to first determine the inadequacy of damages as relief before granting a statutory remedy. H Conclusion on Rohit’s

Summary Judgment Application [ 152 ] I am satisfied that the portion of the Plaintiffs’ claim against Cambrian and Mattamy dealing with the Easement can be dealt with in this

summary judgment application. There is no merit to the Defendants’ defence in respect to this part of the Plaintiffs’ claim. There is no genuine issue for which a trial is necessary. The registration of the Easement and Cambrian’s ongoing refusal to discharge it from title is a breach of the Option Agreement. The appropriate remedy is an order directing the discharge of the Easement registered as Instrument No. 132 341 854 on the certificate of title to the Option Lands pursuant to s 190(1) of the LTA . I

Summary Dismissal of Rohit’s Claims against Mattamy [ 153 ] None of the parties argued for or against Mattamy’s cross-application for

summary dismissal of the Plaintiffs’ claims against it. The

summary dismissal cross-application garnered but one sentence in Mattamy’s written submissions (being the last sentence in the first paragraph). In oral submissions, counsel for Rohit submitted that Mattamy having brought its cross-application means that it does not dispute the facts of the matter. Nothing more was made of the

summary dismissal cross-application. It is particularly telling that both the Affidavit of Tim Warner and the Supplemental Affidavit of Tim Warner end with a statement that they are made in response to Rohit’s application for

summary judgment. No corresponding statement is made that they are in support of Mattamy’s cross-application. [ 154 ] Accordingly, I dismiss Mattamy’s cross-application for

summary dismissal. J Costs [ 155 ] The Plaintiffs have been wholly successful in their application. Mattamy was unsuccessful in its cross-application. The Plaintiffs are entitled to two sets of costs and they are awarded. If the parties are unable to agree on costs, they may make an application in writing within 45 days of the date of these reasons for my determination. I reserve jurisdiction on all costs issues up to and including the awarding of full indemnity costs. Heard on the 25 th day of March, 2015

Dated at the City of Edmonton, Alberta this 11 th day of June, 2015. D.R.G. Thomas J.C.Q.B.A. Appearances: Ms. Janice A. Agrios, QC (Ke

[…]